Introduction to MetaTrader 4 (MT4)
MetaTrader 4 is the gold standard of trading platforms: popular, globally recognised and best in each aspect. You would hardly come across any trader who has not used MT4 or hasn’t heard about it. Traders, irrespective of their level of experience, origin or choice of trading currencies, embrace MT4. Even though MetaQuotes has come up with a powerful version of the MetaTrader platform, MT5, traders have still preferred MT4 for their trading needs. This has helped MetaTrader 4 keep its relevance and hold its ground firmly since 2005, the year of its inception. If you are wondering what’s so special about this platform, let me tell you that it’s not one or two things but several aspects. MT4 is the most user-friendly and versatile platform. Its charting capabilities are unmatched. You can create custom indicators, customise charts, apply technical indicators, enable one-click trading, and do much more.
Placing and Managing Trades
MT4 supports different types of orders, and here we are going to talk about the two most common order types: Market Orders and Pending Orders.
An order is basically a request to place a trade. When we place a market order, we request our broker to execute the trade immediately, and a broker does so by executing the trade at the best possible price available at that moment. However, when you want to enter the trade at a price that is better than the current market value, you must place a pending order. This order type instructs the broker about executing your order at a level you desire.
Pending orders are of four types: buy limit, sell limit, buy stop, and sell stop.
Now let’s talk about how to place Market and Pending orders.
First off, to enter a trade via market execution:
- Click the New Order button.
- Select the currency pair you want to trade from the drop-down box that will appear.
- In the Order Type, choose Market Execution.
- Enter the lot size.
- If you want to add any notes or comments about your trade, you can write them in the optional comment field.
- Finally, decide whether you want to BUY or SELL the currency pair, and click the execute button.
Now, let’s talk about entering a Trade via Pending Order:
- Again, you should start by clicking the New Order button, just like you have done for market execution.
- Select the currency pair you want to trade.
- Choose Pending Order in the Order Type.
- Decide whether you want to BUY or SELL the pair, and then choose one of the four options:
- Buy Limit: If you want to buy at a price that’s lower than the current market value.
- Sell Limit: If you want to sell at a price higher than the current market value.
- Buy Stop: If you want to buy at a price higher than the current market price.
- Sell Stop: If you want to sell at a price lower than the current market value
5. Enter the desired price at which you want to enter the market.
6. Specify the position size in the volume field.
7. Place stop loss and take profit levels.
8. You can even set an expiry date for your pending order if you wish.
9. Once everything is filled out, hit the Place button.
Alright, now that we’ve learned to enter our trades, we should also know how to modify them and how to exit.
To modify your trades, go to the Trade tab. It’s where you’ll find all your trades and their details, or you can also press CTRL + T on your keyboard. After that, right-click on the trade you want to modify and select the “Modify or Delete Order” option.
To close the open trade, select the “Close-order option” by right-clicking on the trade, and that’s it.
Using Expert Advisors (EAs) in MT4
Expert advisors are trading bots or software programs that automate your trading activities. You can program your EA once, and based on those rules, it will execute trades on your behalf. Amazing, Isn’t it? But how to use expert advisors in MT4, let’s find out.
You always have two options, you can either build your trading bot from the ground up or buy a readymade EA. Building EAs requires you to have a knowledge of a programming language called MetaQuotes Language (MQL), so it takes time and effort. But If you’ve found a ready-made EA that you have faith in, then you can skip all the hard work and install a ready-made EA. You need to copy that into the ‘experts’ folder. Now you will find your EA in the ‘Expert Advisors’ section on the left-hand side of your screen. From there, drag it onto a chart, make adjustments if you want, and you’re ready to roll.
Risk Management Tools in MT4
Managing risk is crucial in trading, but it’s often overlooked. This is why it’s no surprise that more than 80% of traders end up losing money, not because they need to gain experience or a good strategy but because they need to manage their risk effectively. Remember the saying, “Cut your losses” To become a successful trader, it’s important to have strict risk management in place. This is why we will discuss some common techniques you can use in MT4 to manage your risk effectively.
The most important way to manage risk is to use a stop loss. This allows you to set a price at which you want your trade to close automatically if the market moves against you. For instance, let’s say you enter a trade expecting the price to go up, but it unexpectedly drops and hits your stop-loss price. In that case, the trade will be closed, preventing further losses. You can use trading calculators to determine various factors that will help you manage your risk effectively.
You can also use a trailing stop loss. A trailing stop loss automatically adjusts as the market moves in your favour. Let’s say you enter a trade, and the price starts to go in the direction you anticipated. With a trailing stop loss, you can set a certain distance or percentage away from the current market price. If the price continues to move in your favour, the stop loss will trail along, always maintaining that distance.
Similarly, to secure your profits, you can use trailing take profits. When a trade is going in the desired direction, traders often let their guard down and forget about floating profit. A trailing take profit allows you to set a price at which the position will be closed once it’s reached. This way, you can protect the profit you’ve already made.
Position sizing is also quite important if you want to control your risk per trade. Before entering a trade, you should determine the trading capital you should allocate for a particular trade, this will play a significant role in helping you minimise your losses.
Advanced Tips and Tricks for MT4
Keyboard Shortcuts and Hotkeys: Just like how you use shortcuts on your computer, you can also use “hot keys” on MT4.
For example, if you want to open or close module windows on MT4, simply press Ctrl+T. If you’re curious about knowing all the available keyboard shortcuts, you can find them under the ‘View’ menu on the main menu bar. It’s a good idea to familiarise yourself with the shortcuts for all the main commands.
To get the full list of MT4 hotkeys, Press the F1 key > Navigate to ‘Client Terminal’ > Scroll User Interface > ‘Fast Navigation, and that’s it!
Customising Chart Templates: You can customise the look of your MT4 charts by right-clicking anywhere on the chart you want to customise. You’ll see a menu pop up, and from there, select “Properties.” You can also press the F8 key on your keyboard to open the chart properties.
Once in the chart properties window, you can change the background colour to white and the text colour to a cool, dim grey. As you make these changes, you’ll see a preview of how the chart will look in the properties window. Play around with different colours until you find the combination you like. You can also personalise the grid colour by clicking on the “Custom Colors” option. You can also choose a version of green for bullish candles and red for bearish candles. Pick the colours that resonate with you and make the chart visually appealing.
Suppose you want to remove the period separator, press Ctrl + Y on your keyboard or go to the “Common” tab in the chart properties window. Once there, simply uncheck the box that says “Show period separators.”
Using One-Click Trading: One-click trading makes placing trades super quick and easy. Instead of going through the usual process of clicking the ‘New Order’ icon, you can use a shortcut to enable one-click trading. Just press ‘Alt + T’ on your keyboard or simply right-click on any chart and select ‘One Click Trading’ from the options.
Once you activate one-click trading, you can click the ‘Buy’ or a ‘Sell’ button after assessing the bid and ask prices displayed.
Apart from these features. MT4 also offers access to forums and online communities where users can interact with other professional traders on the platform. They can share their trading ideas or get useful insights. Overall, MT4 is an excellent tool for traders to take their trading experience to the next level. This is why it has gained a massive fanbase over a period of time.
